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New cars will probably become much more expensive in the United States after President Trump imposed a new 25 percent tariff on foreign-made cars.
Cox Automotive, a research firm, estimates that tariffs would add $6,000 to the price of a car made in Mexico or Canada, two of the top exporters of vehicles to the United States. Affected models include the Toyota Tacoma pickup, gasoline and electric versions of the Chevrolet Equinox, and several models of Ram pickups. Ram is owned by Stellantis, which also produces Dodge, Chrysler and Fiat vehicles.
In addition to Canada and Mexico, the United States imports many cars from Japan and South Korea. Smaller numbers come from European countries, including Germany, Italy, Sweden and Britain.
Higher prices will deter buyers and force automakers to curtail production, said Jonathan Smoke, chief economist at Cox Automotive. He forecast that U.S. factories would produce 20,000 fewer cars per week, about 30 percent less than usual.
“By mid-April we expect disruption to virtually all North American vehicle production,” Mr. Smoke said on Wednesday during a conference call with clients and reporters. “Bottom line: Lower production, tighter supply and higher prices are around the corner.”
In addition to the impact on car buyers, tariffs could hurt Americans who are employed in factories and car dealerships.
About one million people in the United States are employed in auto and parts manufacturing, according to the Bureau of Labor Statistics. Two million more work at dealerships that sell cars or parts. If automakers are forced to significantly reduce production, they are likely to furlough workers at factories, and dealers would have to cut jobs if higher prices hurt sales.
New cars will probably become much more expensive in the United States after President Trump imposed a new 25 percent tariff on foreign-made cars.
Cox Automotive, a research firm, estimates that tariffs would add $6,000 to the price of a car made in Mexico or Canada, two of the top exporters of vehicles to the United States. Affected models include the Toyota Tacoma pickup, gasoline and electric versions of the Chevrolet Equinox, and several models of Ram pickups. Ram is owned by Stellantis, which also produces Dodge, Chrysler and Fiat vehicles.
In addition to Canada and Mexico, the United States imports many cars from Japan and South Korea. Smaller numbers come from European countries, including Germany, Italy, Sweden and Britain.
Higher prices will deter buyers and force automakers to curtail production, said Jonathan Smoke, chief economist at Cox Automotive. He forecast that U.S. factories would produce 20,000 fewer cars per week, about 30 percent less than usual.
“By mid-April we expect disruption to virtually all North American vehicle production,” Mr. Smoke said on Wednesday during a conference call with clients and reporters. “Bottom line: Lower production, tighter supply and higher prices are around the corner.”
In addition to the impact on car buyers, tariffs could hurt Americans who are employed in factories and car dealerships.
About one million people in the United States are employed in auto and parts manufacturing, according to the Bureau of Labor Statistics. Two million more work at dealerships that sell cars or parts. If automakers are forced to significantly reduce production, they are likely to furlough workers at factories, and dealers would have to cut jobs if higher prices hurt sales.
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